3/24/2010 @ 6:00PM

Nascar's Highest-Paid Drivers

Hendrick Motorsports dominated the action on the track last year and captured the top three spots in the Nascar Sprint Cup standings. Yet none of those three drivers could top the fourth driver in Hendrick’s stable when it came to earnings prowess.

Dale Earnhardt Jr. is Nascar’s highest-paid driver for a second straight year with earnings of $30 million in 2009. Earnhardt has had little racing success the past two years, with only one win at the track. He finished a disappointing 25th in the Sprint Cup standings last year, but was voted Nascar’s most popular driver for a seventh straight year.

Our earnings estimates include salaries, endorsements and the drivers’ share of track winnings and licensing income. Earnhardt’s immense popularity translates into big dollars in each of these areas outside of track winnings. “Nascar needs Dale Jr. to be competitive, because he is so closely associated with the success of the sport. [As] go the fortunes of Junior, so goes Nascar,” says Ardy Arani, managing director of Atlanta-based Championship Group, a motor sports marketing consultancy.

Owner Rick Hendrick lured Earnhardt to Hendrick Motorsports before the 2008 Nascar season. He promised a chance to compete for a cup championship and an eight-figure annual salary that rivaled Jeff Gordon’s for the highest in the sport. The deal made Earnhardt the top earner in Nascar–and it was good business for Hendrick.

Earnhardt’s car attracts more than $30 million in annual total sponsorship revenue from the likes of
PepsiCo’s
Mountain Dew Amp Energy and the National Guard, helping Hendrick to be the most profitable team in Nascar. Earnhardt’s name sells more Nascar-licensed merchandise than any other driver, and Hendrick gets a piece of this as well. Personal endorsements with companies like
Adidas
, Nationwide Insurance and Wrangler generate $10 million for Earnhardt annually.

The second highest-paid driver is four-time Nascar Cup champion Jeff Gordon, who earned $27 million last year. Gordon ended a 47-race winless streak when he won the 2009 Samsung 500. He is the first Nascar drive to collect $100 million in winnings on the track (he’s earned $110 million during his 19-year career). Gordon extended his contract with Hendrick at the end of 2009 and plans to race through at least 2013.

Earnhardt and Gordon, like most other Nascar drivers, saw their earnings take a haircut in 2009. Total pay was down 6% for the 10 highest-paid drivers. Earnhardt’s income dropped $5 million from $35 million in 2008, thanks to lower prize money due to his poor performance on the track and the collapse of the licensing market. Gordon’s income fell $3 million, mainly from the weak licensing market.

Sales of licensed merchandise was a healthy income stream for drivers in years past, but now represents less than 5% of total income for all but the top drivers. Only the four best-selling drivers–Earnhardt, Tony Stewart, Gordon and Jimmie Johnson–netted more than $1 million in 2009 from licensed merchandise. Blame the economy and the saturation of the marketplace, says Zak Brown, chief executive of Just Marketing International, a motor sports marketing company in Zionsville, Ind.

Race winnings which are split among owners, drivers and their crew are also headed for a fall, as Nascar announced in January that purses would be cut by 10% in 2010. The reduction was made to help tracks who pay the purse and have struggled with declining ticket prices and attendance.

Driver salaries are on their way down too. “There is not the sponsorship revenue to pay them,” says Arani. Kasey Kahne (11 career wins) and Kevin Harvick (11 wins) both are in the last year of their contracts with their current teams and are Nascar’s leading free agents. Both have solid track records and should command new big deals. Just not too big.